X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

SAN FRANCISCO-Morgan Stanley Real Estate has closed on its $2.43-billion acquisition of seven CBD office developments here from Equity Office Properties Trust, which was recently acquired by Blackstone Group. The portfolio comprises 2.94 million sf of built space, includes the 1.4-million-sf One Market complex, and a 336,000-sf office development project.

In addition to One Market, the portfolio sold to Morgan Stanley includes One Maritime Plaza (534,000 sf), 150 California St. (201,000 sf), 201 California St. (250,000 sf), 60 Spear St. (133,000 sf), 188 Embarcadero (aka Bayside Plaza, 88,000 sf) and the 75 Howard St. parking garage. The development project is Foundry Square I, a $145-million redevelopment that when complete will be the new headquarters of Barclays Global Investors.

Early reports regarding the deal between Blackstone and Morgan Stanley estimated the deal at $2.5 billion and $4.14 billion. Properties thought to be in the deal that ultimately were not include: One Post (421,000 sf), 201 Mission (489,000 sf) and 580 California St. (318,000 sf). The one property specifically left out of the deal from the start is the Ferry Building, a 240,000-sf development for which a $100-million rehab was completed in 2003. Equity Office’s entire Bay Area portfolio totals approximately 14.5 million sf.

Neither Blackstone nor Morgan Stanley could be reached Wednesday for comment on the acquisition. In a prepared statement, Morgan Stanley managing director Michael Franco describes the deal as a “rare opportunity to acquire a significant portfolio of well-located assets in San Francisco’s central business district, one of the most supply constrained office markets in the country. We believe that the occupancy characteristics of these high-quality office buildings coupled with our expectation for one of the fastest net operating income growth rates of any city in the nation position the portfolio for outperformance.”

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.